Acquisition of 97.83% equity stake of Crochet Industries Private Limited
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Cupid Breweries and Distilleries Ltd has acquired a 97.83% equity stake (4,40,25,010 shares) in Crochet Industries Private Limited (CIPL) through an all-share swap, with no cash outflow. To fund the acquisition, the board allotted 5,00,12,411 equity shares at Rs. 60 each (Rs. 10 face value + Rs. 50 premium) to CIPL shareholders, plus another 10,10,591 shares via conversion of unsecured loans. CIPL, incorporated in 2019, manufactures alcoholic spirits and distilled beverages with facilities in Odisha and reported nil turnover in the last three financial years but had revenue of about Rs. 1.76 crore as of December 2024. The acquisition is intended to help Cupid expand into the IMFL and breweries manufacturing business. Two key allottees — Erramilli Venkatachalam Prasad and Rodrigues Bhagvandas Lily — will be classified as promoter shareholders once the open offer process (triggered in December 2023) is completed.
This is a meaningful business expansion for Cupid into alcoholic beverage manufacturing in Odisha, which positions it as a gateway to East and Northeast India. Existing shareholders face dilution from the large preferential allotment (over 5 crore new shares), but since the deal is entirely a share swap with no cash outflow, financial leverage is unaffected. The stock reaction will depend on how investors view the future revenue potential of CIPL's currently low-revenue assets.